The California Public Utilities Commission Votes to Approve Decision Revising General Order 156, Supplier Diversity Program, Adopting a Voluntary Procurement Goal for Lesbian, Gay, Bisexual, and Transgender Business Enterprises

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By Benjamin L. Sheinman

On April 7, 2022, the California Public Utilities Commission (CPUC) voted 5–0 to approve D.22-04-035. This decision, proposed by Commissioner Rechtschaffen, revised the Commission’s Supplier Diversity Program, set forth in General Order (GO) 156, to incorporate a voluntary procurement goal for Lesbian, Gay, Bisexual, and Transgender (LGBT) business enterprises.  The decision also expands the Supplier Diversity Program to include a “Persons with Disabilities Business Enterprise.”

This decision was issued pursuant to an Order Instituting Rulemaking R.21-03-010, opened in March 2021, for the purpose of considering revisions to the Commission’s Supplier Diversity Program—the Commission’s mechanism for implementing state policy encouraging award of utility procurement contracts to women and minority-owned business.  In June 2015, the Commission approved D.15-06-007, in response to AB 1678 (Gordon) (Chapter 633, Statutes of 2014), which extended the provisions of the utilities’ Supplier Diversity Program to LGBT business enterprises. That decision modified GO 156 to include LGBT business enterprises in the Supplier Diversity Program but did not include a voluntary procurement goal.  Instead, the commission adopted a five-year framework, during which time the Commission was to gather data to support the eventual establishment of a meaningful target goal for LGBT business enterprise.  This decision now adopts such a goal.

For 2022, the Commission adopted a 0.5% voluntary procurement goal for LGBT business enterprises.  The goal increases by 0.5% each year, culminating in a 1.5% goal in 2024.  As a point of comparison, the goal for women’s business enterprises is 5% and the goal for minority business enterprises is 15%. The decision recognizes opposition received and cites a letter from the California Legislative LGBTQ Caucus which expressed concern that “[s]etting the procurement goal for LGBTQ business so far below other participants sends a message that the CPUC does not value our community.” In arriving at its goals, the Commission recognized in its decision that “[h]istorical data reflects past barriers to full participation in the utility industry and may also reflect too little effort by some utilities to increase opportunities to contract with LGBT business enterprises.” The Commission suggests that the LGBT business enterprise goals in this decision successfully balance a reliance on historical data with an objective to increase procurement from LGBT business enterprises.

With respect to Persons with Disabilities business enterprises, the Commission did not adopt a voluntary procurement goal with this decision.  Instead, the decision allows for the collection of additional data, with an expectation that voluntary procurement goals for Persons with Disabilities business enterprises will be added in approximately three years.  D.22-04-035 became effective on April 7, 2022. R.21-03-010 remains open as of the time of this publication.

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